A return of 85% annualized over 9 years with only stocks?! Meet Juerg Maurer from Switzerland...

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About a year ago, our Swiss national tabloid, the Blick, had discovered that a pension fund manager, his name is Juerg Maurer, had amassed a personal fortune of almost CHF 68 million ($56 million) as of 2005 from CHF 250'000 in 1991, and he is only 55 years old. He resides in a $20 million mansion with tennis hall, sauna, swimming pools, two Porsches, a Maserati, and whatever... He also has a stake in a vineyard in Spain and two luxurious holiday apartments worth several millions.

Juerg Maurer's "home"

However he "forgot" to file his tax declaration for several years (you can do this legally in Switzerland, your income and fortune will simply be estimated based on previous years). He filed it later and repaid what he was due. So he had an estimated fortune for several years (1997-2001) of around CHF 450'000. The actual fortune he filed in 2005 was CHF 68 million.

Immediately the Blick jumped onto this story: how can a simple pension fund manager working for a mid cap company amass such a personal fortune in such a short time? As usual they started a campaign with a series on him and how he lives and labelled him "the most impertinent pension fund manager of Switzerland" and the "pension fund rogue" with all possible allegations on how he could have illegally or semilegally have made his fortune.

What's more, Juerg Maurer was on holiday at the same time in Mexico, in a 6 star super luxurious residence called Las Ventanas al Paraiso (the window to paradise) and did not return phone calls. So the headlines were "Holidays like the Hollywood stars", "Mexico Maurer relaxes in paradise and avoids questions", "The most impertinent PF manager goes into hiding", "Maurer's Fiesta Mexicana is over". You could read that each guest has four personal butlers etc. :-) (Hey, you've got Matt Drudge, we've got the Blick...)

The hysteria went so far that some populist politicians (as usual) seized the moment and asked for a law to have pension fund managers have their personal fortune managed by a third party.

After he returned from the holidays he held a press conference and defended himself and also sued the paper for CHF 1 million. Currently the process is going on and here are the facts:

He said he was simply investing in stocks, no options, and just had a good hand. He went full risk personally and never operated to the disadvantage of the pension fund, he never used inside knowledge. His personal fortune was estimated with CHF 275'000 by the tax authorities in 1991and his breakthough years were 1992/93, he had already CHF 12 million by 1995. In 2000 he had CHF 70 million. That's an 85% annualized return since 1991!!!). He then fell back to CHF 42 million in 2002 but has recovered in the meantime and has declared a fortune of CHF 68 million in 2005 (who knows how much it is today? probably higher...), which is still an incredible 48% annualized since 1991. Calculator

He was completely cleared by the company he (amazingly still!) works for (his payroll: he earns CHF 240'000 ($200'000) a year plus a bonus of another $200'000). Apparently he also eats in the factory canteen.

And what did he do for the insured?

From 1995 to 2005 the pension fund had an astounding performance of 14.3% annualized. This for a pension fund which usually is limited by strict regulations, at least here in Switzerland. In comparison Berkshire Hathaway has returned 16.2% annualized over the same time period, without restrictions. Currently the pension fund has a liquidity ratio of 160% and is doing so well that retirees this year will not only receive a 13th monthly pension, but also a 14th and a 15th.

Obviously, there's no need to pay a greedy guy millions to run a fund successfully...

He mainly invested in Swiss companies. There are many Swiss stocks that are vastly outperforming the market, the problem is they are thinly traded, and there was not much information around before the internet days. So as a professional fund manager he was clearly ahead of us ordinary investors at that time. Also the Swiss stock market was very strong in the 90s. From 1991 to 1998 it made 500%! And during the period he mentions 1992/93 the SMI rose 75% while the S&P 500 only rose 10%. So it IS possible.

I myself had a stock that was a 20 bagger from 1997 to 2000 thanks to the tech bubble.

Thanks for completing Mr. Maurer's story! I have plenty of foreign (non-American) stocks, but have yet to get anything from Switzerland. I'll have to keep an eye out for opportunities.

As to your 20-bagger, I hope you were wise and sold at least part of your position before the stock crashed. My worst story from that period is CRA (Celera Genomics). My position went up 300% (a 3 bagger) and then went crashing down. I rode it most of the way down because of my youthful misinterpretation of the "long term buy and hold" philosophy. :(

I bought it when it was unknown, I rode it up to the top, :-) (at one point it was worth $400'000)... and then down again... :-(

I started investing in 1997 so I was still a novice, if you want. And I believed in buy and hold. Unfortunately 911 occurred and the markets crashed. I was also heavily on margin and so I received a letter from the bank. That was a terrible moment, i was bankrupt...

Fortunately I could borrow the money from my father until the markets recovered (I have to say I never would have taken such a risk (margin) if I didn't know that my father could "bail me out", the father-put)

I then sold it at around 95 or so. So no 20 bagger, but still a 5 bagger and a lesson for life: everytime I think back i could kick myself....

Fortunately I also owned Phonak/Sonova and Tecan, unfortunately I sold Phonak too early and Tecan too late, but still 3 baggers both.

Two great Swiss stocks that trade as ADRs on the NYSE are ABB and SYT.

Thanks for sharing your story! Margin is something I've thought about, but in the end, I never used it. At least the value of my portfolio can never go below zero!

As to the best way to play your winners, no matter what you do, you will always feel like you did the wrong thing! Sometimes you will sell a winner only to see the stock go higher. Other times, you hold too long and lose most of your profit. I suppose the best compromise is to sell half when you reach a certain point. If the stock goes down, you've saved part of your profit. If it goes up, you still have plenty of shares to capitalize on the stock's advance. All easier said than done.... :)